Stock Name: SMRT
Company Name: SMRT CORPORATION LTD
Research House: OCBC
OCBC said that although staff costs have stabilized with the completion of most of SMRT's hiring needs, costs associated with electricity and diesel are expected to remain volatile.
Company Name: SMRT CORPORATION LTD
Research House: OCBC
OCBC Investment Research lowered its target price on Singapore land transport operator SMRT Corporation (SMRT.SI) to $2.07 from $2.16 and maintained its hold rating.
SMRT said on Friday its net profit for the fourth quarter ended March 31 rose 50% year-on-year to $34 million mainly due to higher operating profit, but partially offset by higher income tax expenses.
SMRT said on Friday its net profit for the fourth quarter ended March 31 rose 50% year-on-year to $34 million mainly due to higher operating profit, but partially offset by higher income tax expenses.
OCBC said that although staff costs have stabilized with the completion of most of SMRT's hiring needs, costs associated with electricity and diesel are expected to remain volatile.
The brokerage added that SMRT is planning capital expenditures in the region of S$600 million for the 2012 financial year and the firm will most likely have to seek funding and loans for at least $200 million.
However, OCBC said that going forward it expects a pick-up in rental and advertising income to offset the lower ridership revenue from the implementation of distance fares.
Commuters are charged according to the total distance travelled by bus and train, potentially lowering the additional costs incurred from making transfers.
By 9:34 a.m., SMRT shares were up 0.5% at $1.91.
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